Covid Scotland: Restrictions take toll on retail sector as one in seven shops now empty

At 1.4% higher than 2019, this means Scotland has the fifth highest proportion of retail vacancies in the UK.

Likewise, vacancies in shopping centres increased from 16.8% in the third quarter to 18.2% in the fourth.

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However, vacancies on high streets remained steady at 13.5%.

Vacancies in retail parks increased by 1.5%, but they remained the locations with the fewest vacancies at 11.9%.

David Lonsdale, director of the Scottish Retail Consortium, said: “The upheaval and tumult wrought by Covid and repeated government lockdowns and restrictions is taking a heavy toll on shops, many of which have been forcibly closed for five of the past 10 months.

“This second successive quarterly spike in the vacancy rate means that one in every seven stores in Scotland now lies empty.

“These figures don’t include the announcements over recent days of further store closures by some household names – and the likelihood is things will continue to worsen in the coming months.

“Scotland’s shops and retail destinations will only survive with the patronage of the public.

“The extent to which retail remains the cornerstone of our town and city centres and its ability to continue to employ hundreds of thousands of Scots will also depend on the decisions made by policymakers.

“Shop vacancies are at a six-year high, footfall has slumped, and non-food stores have seen revenues plunge by a third.

“We hope to see a recovery plan from government to help get retail motoring again, including some semblance of the potential route back to reopening the sector and out of lockdown.”

Lucy Stainton, head of retail at Local Data Company, which collects the data, said: “The latest LDC vacancy figures clearly show the predicted acceleration in units closing, the catalyst of which being the Covid-19 pandemic.

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“However, this number only reflects the very immediate impact of the pandemic on the retail market. Hundreds of thousands of stores have been struck by changing restrictions and many of these remained temporarily closed in the intervening periods between lockdowns.

“With each round of restrictions, these ‘frozen’ units are less likely to reopen and so we’re predicting the compound effect of each lockdown being visible in later figures.

“Added to this, with recent announcements from the likes of Debenhams and Arcadia, the size of the stores coming on to the market will present a real challenge given the likely lack of demand for larger high street units.

“With a limited number of new store openings, structural solutions will need to be found to prevent these vacant units lying empty for two, three, four years or more.

“Looking further out, the increase in availability of space will provide opportunities for new businesses, however we must prepare ourselves for the picture to get worse before it gets better.”

It comes after Scotland’s Finance Secretary announced her Budget plans yesterday.

Outlining her draft spending plans in the Scottish Parliament on Thursday, Kate Forbes said the pandemic had “shaken our society and economy to their core”.

Describing Brexit as a “wrecking ball”, she added: “Today’s Budget will help to bring much-needed support and stability, to ensure our economy recovers and we protect those who have been hit the hardest.

“Our approach continues to target support in the immediate term, as well as tracking a course over the coming year to build a fairer, stronger and greener country.”

She announced £1.1 billion of support for jobs and skills and £16 billion for health, as well as a further £869 million for tackling coronavirus – including funding for the vaccination and test and trace programmes.

Ms Forbes said the strategic framework business fund, which provides grants based on restrictions put on businesses, will continue beyond this financial year, provided funding is forthcoming from the UK Government.

Grants being paid to businesses in February will also be paid at the maximum level, regardless of the level of restrictions on firms, she said.

Councils will also see an increase in their finances, with discretionary funding doubling to £60 million and a further £200 million to compensate for a loss of income due to the pandemic.

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All Scottish taxpayers will pay slightly less this year than last, Ms Forbes added, as the tax band system will remain unchanged.

The starter, basic and higher bands of tax will all rise by inflation, with the top rate frozen at £150,000.

Non-domestic rates relief for some businesses will be extended for three months, until more clarity is offered from the UK Government.

Ms Forbes said businesses in the retail, hospitality and leisure sectors will continue to pay nothing while other firms will see their rates fall.

She also said a national infrastructure plan for Scotland which aims to support 45,000 jobs across the country will be announced next week, investing £1.5 billion by 2025-26.